Climate Change Minister David Parker and Associate Transport Minister Judith Tizard and today announced measures to improve the fuel economy of the country's vehicle fleet, in order to reduce emissions that contribute to climate change and pollution.

“New Zealand imports all its vehicles so we have the opportunity to select the best – not the mediocre," Judith Tizard said.

"New Zealanders can choose vehicles with almost zero harmful exhaust emissions, we can choose the fuel efficiency of our cars and we can choose the type of fuel they run on. We're doing our health and our clean green environment a disservice if we don’t."

The government has directed the Ministry of Transport to work with the motor industry on a regulated sales-weighted fuel economy standard for new and second-hand vehicles. This will involve options for improving the average fuel economy of vehicles entering the country.

Officials will also look at options for restricting the age of second-hand vehicles being imported into New Zealand to help reduce vehicle emissions.

Mr Parker said making progress in this area was important for the health of communities and for meeting climate change objectives.

"The Energy Outlook to 2030 shows that if we do not change our policy settings, transport greenhouse gas emissions increase by 35 percent over the next 25 years. We cannot - and will not - let that happen," David Parker said.

“The measures we are considering make good sense for the environment, but also economically, because they mean New Zealanders will save money on fuel."

Judith Tizard also emphasised the link between import standards and the upcoming biofuels sales obligation.

"As the use of biofuels increases, we’ll be sending strong signals supporting the import of biofuels compatible vehicles.”

The Ministers said the proposal complemented other government initiatives to improve vehicles emissions, including this month's introduction of a visible smoke test as part of the warrant/certificate of fitness, and the Choke the Smoke campaign, which promotes better car maintenance and encourages alternatives to car use.

Other work to be undertaken includes developing a vehicle fleet strategy to bring together the government's climate change, vehicle safety, and air quality initiatives; options for encouraging the uptake of fuel efficient cars like hybrids, and mandatory labelling of vehicles for fuel efficiency at point of sale.

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For more information see:

• the government's Climate Change website: www.climatechange.govt.nz
• David parker's feature article on the government's climate change policy, here

• Q&As below
• Cabinet paper & Cabinet Minutes attached

Questions and Answers

1. What are the likely fuel savings of the announcements?

The measures are not yet fully developed and factors such as fuel price can influence effectiveness of any one measure. Initial analysis suggests that if the average fuel economy of the New Zealand light vehicle fleet improved in line with other regions, such as Europe or Japan, then we can expect significant improvements in the order of 12% by 2020 compared to “business as usual”.

2. Is there a problem with second-hand Japanese vehicles being imported into New Zealand?

In terms of fuel use, the Japanese "used cars" imported into New Zealand in any given year have a better average fuel economy than the average new car imported into New Zealand in that year. This is mainly because the Japanese used-cars tend to have smaller engines. (New Zealanders buying a new car tend to buy larger more powerful cars, e.g. a Holden Commodore or Ford Falcon, and so use more fuel.) This also reflects a global trend that newer vehicles tend to have larger engines (at least in part because they now have more safety features such as air bags that make them heavier).

In terms of harmful emissions, there's considerable room for improvement. The average used Japanese vehicle brought into the country is around eight years old, and many do not have the benefit of the emissions reducing technologies used in later models. Newer cars must by law be built to current global standards for low harmful exhaust emissions.

3. What is the relationship between harmful emissions, fuel economy and greenhouse gas emissions?

Carbon dioxide, or CO2, is the predominant greenhouse gas from burning transport fuels. The amount of CO2 released by a vehicle is directly related to the amount of fuel consumed - petrol or diesel. (For example, a litre of petrol produces 0.0023 tonnes CO2.)

Emissions that are harmful to our health include carbon monoxide and oxides of nitrogen, and the small particulates generally associated with diesel engines known as PM10. These emissions are generally addressed by technologies that improve the combustion of the fuel or filter the exhaust fumes. Reducing the total fuel used can also be an effective way of reducing harmful emissions.

Fuel economy generally relates to the size and weight of the vehicle. Vehicles that require more power to move tend to need more fuel. Two new vehicles can have vastly varying fuel economies but both meet the same very stringent standards for harmful emissions. So this means that a small, fuel efficient car like a Honda Jazz has the same harmful emissions as one with very high fuel consumption like a Ferrari.

4. Won’t the proposed measures to improve fuel efficiency adversely affect the range of cars available?

The government announcements do not suggest that second-hand cars will be prevented from entering the country, nor will people be prevented from bringing in luxury and performance cars, even though they often have high fuel usage per kilometre. But the general intention is to change buying patterns, so some limitations are likely in the future. Some older models may not be available, and a requirement to improve the average fuel economy of the fleet may mean new incentives to purchase more fuel efficient vehicles.

The implications on vehicle choice and availability will be one of a number of matters given further consideration as options to improve fuel efficiency progress.

5. What is the time frame for developing and implementing these measures?

Although the government seeks to progress this work “with urgency”, it is likely that supporting legal measures will be required and these necessarily take time.

6. What do we currently know about the quality of the vehicle fleet?

For fuel economy, we have data on the trends for vehicle engine size (which historically relate to fuel economy). In New Zealand we have been collecting data on the fuel economy of vehicles entering the fleet (measured in litres per 100km) since March 2005.

In regard to harmful exhaust emissions, the age of a vehicle is generally a good indicator as standards for all types vehicles and fuels have progressively tightened over past years. A vehicle’s emissions control technology (and therefore its designed ability to have low levels of harmful emissions) can be determined from the year of manufacture and the country of origin.

The data is sufficient to be able to state confidently that we can make better vehicle purchase decisions.

7. Will these measures affect trucks and buses?

The focus of these announcements is vehicles under 3.5 tonnes. This includes all cars, light vans and 4WDs. It excludes buses and big trucks, although measures to control the harmful exhaust emissions are also expected to apply to these heavy vehicles.